Investors Shift Focus to Premium Properties in Q4 Surge

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Good morning. Investors are zeroing in on premium deals as rate cuts reshape the CRE landscape—setting the stage for a strong year-end push.

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• Podcast: Matthew Mannion, famed for handling high-profile NYC real estate auctions, shares insights from courthouse steps to the complexities of closing landmark deals amidst rising foreclosures.

• Rate predictions: Deutsche Bank expects the Fed to halt rate cuts after December, while Goldman Sachs and Citi foresee deeper reductions in response to economic conditions.

• Tahoe Village: Palisades Tahoe secured approval for a transformative village expansion, including lodging, workforce housing, and recreation facilities, despite environmental concerns.

• Side hustle: Star athletes, including Floyd Mayweather Jr. and Manu Ginobili, are leveraging their wealth to enter real estate ventures from luxury rentals to affordable housing.

• Rebuilding: Chicago’s $20M Rebuild 2.0 program aims to transform abandoned properties in disinvested neighborhoods into homes for local residents, promoting revitalization and homeownership.

• Hot market: Fisher Island, Florida, tops the list of priciest U.S. rental markets, with median one-bedroom rents soaring to $20,000 monthly.

• New problem: Overbuilding and risky investments are straining the multifamily sector, but experts argue its challenges differ fundamentally from the office market.

• Unpaid balance: Acres Capital is suing Tides Equities' co-founders for $5M in personal liability and $8.2M in damages, citing loan defaults, neglect, and unmet renovation commitments at a foreclosed Dallas property.

• Touchdown in Tampa: Continental Realty Corp. acquired Henley Tampa Palms for $82M, aiming to elevate the Class B multifamily property with value-add upgrades in a high-growth market.

• Affordable vision: The San Antonio Housing Trust plans to acquire nearly 6 acres in Cattleman Square to preempt gentrification, preserve affordability, and involve the community in future housing plans.

• Florida sale: Blackstone sold the Horizon at Miramar apartment complex for $121.3M to Bell Partners, which plans to revamp the 349-unit South Florida property.

• Ambitious venture: Venture One Real Estate closed on the 2-million-square-foot VenturePark65 project in Crown Point, Ind., with plans for customizable industrial facilities on 137 acres.

• Rent growth: U.S. in-place industrial rents rose 6.8% year-over-year in October to $8.22 per square foot, a modest six-cent increase from the prior month, per CommercialEdge.

• Thankful for Amazon: Clarion Partners purchased a 158,340-square-foot Class A industrial facility in Summerville, S.C., for $25.3M, fully leased by Amazon as a distribution hub.

• Store closures: U.S. store closures surged to 6,481 in 2024, surpassing last year’s total, as retail bankruptcies pile up.

• Drive-Thru: Retailers are increasingly adopting smaller, drive-thru-only formats to boost efficiency, reduce costs, and access premium locations with limited space.

• NYC revival: Manhattan retail is rebounding, with Blackstone's $200M Soho acquisition reflecting soaring rents, declining vacancies, and luxury brands securing flagship properties.

• Delinquencies: Office CMBS delinquency rates surged to 9.37% in October, marking a notable jump of 101 basis points and surpassing a 9% threshold not seen since 2012-2013.

• Riverside acquisition: Dunbar Real Estate acquired the 138,700-square-foot Summit Business Center in Riverside for $19M, highlighting Inland Empire’s appeal amid low office vacancies.

• Oakland bargain: Harmit Mann acquired The Landing office complex in Oakland for $13M, a 67% discount from its 2019 price, as crime and vacancies reshape the local market.

📈 CHART OF THE DAY